Smart Lighting Technology May Offer A Brighter Idea

A new lighting control system could dim prospects for competing technologies such as LED lighting and put the spotlight on the booming energy-efficiency industry.


Toronto’s Cavet Technologies recentlyrolled out its new LumiSmart lighting-control system that touts a 30 percent or better reduction in power usage for lights with “no perceivable difference to occupant comfort,” says company CEO Albert Behr.

The market is huge.

According to the US Department of Energy, lighting accounts for some 25 percent of total electricity consumption in the US, costing about $40 billion annually.

Behr says his firm’s system promises to “dramatically reduce these high costs within minutes of its installation.”

Since it is such a large piece of corporate power bills, companies large and small have been working on new concepts to slash lighting costs.

Beyond LEDs

So far, much of the attention has been focused on the “next generation” of energy efficient lighting: solid state technologies, like light emitting diodes, LEDs.

Electronics makers like Philips and lighting firms like Osram Sylvania have been working on new LED fixtures and bulbs that promise to cut overall operational lighting costs by up to 70 percent.

LEDs are also considered to last longer than current incandescent and fluorescent bulbs, and more flexible in use and control.

But LEDs are still considered a decade away from mass commercialization, and the technology requires rewiring entire building—ripping open walls and disrupting employees and tenants.

“For the next few years, [LED installation] rounds off to zero,” says Mike Wapner, analyst for cleantech research firm Pike Research. He points out that over the next several years, LEDs will probably still be used in primarily in new building construction versus retrofitting existing buildings.

The Carbon Challenge: A CNBC Special Report
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“By’s still just a few percent,” he says, but adds that the technology provides great opportunities “now and into the [near] future” for any firm squeezing energy savings out of the ubiquitous fluorescent tubes found in most commercial and industrial buildings.

And with new construction estimated to be less than 2 percent of total building inventory for the next few years, lighting control makers are focusing on the retrofit market, creating products that work with existing light fixtures and can be installed with less disruption.

Currently, market penetration for lighting controls is low. Most participants put it at less than 10 percent for the existing building market.

Quick Payback

But with large potential energy costs savings at stake, and with relatively low upfront equipment and installation costs, the current economic climate is making lighting controls an attractive investment for building owners.

Michael D’Amour, CEO of California-based lighting control startup Lumenergi and a tech veteran who has taken two other firms public in his career, says lighting controls “feels like the biggest opportunity yet. Intelligent lighting is the largest single piece of energy on the grid.”

But even with many lighting control firms promising seemingly short paybacks of one to three years, the high end of that range may not be fast enough for some clients.

“It’s important to hit a two-year payback or less,” says Omar Siddiqui, energy efficiency program manager for the Electric Power Research Institute, an independent research lab for the power industry.

Real estate valuations have been hit hard in the current economic crisis, and building owners need to see any new dollar invested come back as quickly as possible. “If the savings justify the upfront costs, then that would allow lighting controls to be included [in retrofits],’ says Siddiqui.

That makes triggering the decision to buy heavily dependent on the upfront costs of the control technology. Many existing lighting control makers—from newcomers like Lumenergi to established lighting equipment firm Lutron—provide control boxes and software, as well as ballasts and low voltage wires that need to be added to every light fixture to make them controllable.

Cavet’s Behr says his LumiSmart technology simplifies that further, requiring the installation of a $2,000 control box in an electrical closet or at the head of a circuit, with nothing added at the fixture.

The control box alters the voltage flowing through the circuits to lower energy use without the light dimming noticeably.

A survey of firms in the control sector, including Lutron and Lumenergi, shows upfront system installationcosts between 80 cents and $4.00 per square foot in a typical 50,000 square-foot commercial building.

Cavet claims its easier-to-install system costs a 25 cents or less per square foot. Behr says that can provide a six-month payback, in some cases.

Incentives Needed

Various state- and utility-level energy efficiency incentives can also speed up those returns, showing a growing realization in the energy marketplace that a megawatt saved can be the cheapest and greenest energy there is.

While counting carbon emissions may have originally spurred some of those policy initiatives, now it’s all about the bottom line of energy savings, says Brennan Matthews, national sales manager for Lutron.

Iit’s [becoming] second fiddle to energy efficiency,” he says.

A 2008 report by the American Council for an Energy Efficient Economy, an energy efficiency think-tank, predicted that investment in technology could result in an efficiency market of $700 billion by 2030, with the sum of investments over the period 2008-2030 of totaling nearly $7 trillion.

Meanwhile, any federal policy on capping carbon emissions is still far from certain.

“Our team saw the savings right away,” says an operations manager at a firm evaluating Cavet’s technology for purchase. He added that his firm also has a corporate goal to cut carbon emissions, and that Cavet’s technology “basically gets us to our [carbon] goal overnight. It’s like an afterthought.”

As for the LumiSmart technology, competitors say that while they haven’t heard much about it —Cavet has one demonstration facility at a Celestica plant, which also happens to be LumiSmart’s manufacturer—the idea of voltage regulation isn’t new.

“We did that 35 years ago, and we got out of the business,” says Lutron’s Brennan, adding the quality of light provided by these systems isn’t stable. “You can make that box as technical as you want, but you’re still going to have downstream issues.”

Cavet’s Behr says his team is well aware of these concerns, and adds that they have solved them. “It’s not revolutionary,” he says of his firm’s approach to regulating voltage. “Yet no one’s put it together until we did.”